Investors are closely watching a political process to impeach the business-minded president of gas and copper-rich Peru.
Lawmakers from four political caucuses filed a motion today to impeach Pedro Pablo Kuczynski on grounds he is "morally unfit" to govern.
The motion followed revelations on 13 December that the president received more than $780,000 in payments from corruption-tainted Brazilian contractor Odebrecht between 2004 and 2007.
Kuczynski, 78, denied several times having had a professional relationship with Odebrecht, most prominently in a 23 October letter to the congressional committee investigating the company after it admitted last December of having paid $28mn in bribes in Peru to secure contracts, part of a regionwide system of graft. The payments would have been made when Kuczynski served as finance minister and cabinet chief in a previous government.
Odebrecht won more than $14bn in contracts in Peru, including for the 456MW Chaglla hydroelectric plant, which has operated since last year, and the $7.3bn southern gas pipeline, which was never built. The company lost the pipeline contract last January.
The president late yesterday denied the allegations, saying the information provided to congress was only partial and that he would prove he did nothing wrong. He offered to appear before lawmakers on 22 December.
But his opponents in the congress do not want to wait. The impeachment motion was signed by 27 lawmakers, more than half from the dominant Popular Force party, which has 71 seats in the 130-member unicameral Congress. The president defeated Popular Force's leader, Keiko Fujimori, by less than 50,000 votes, out of 18mn cast, in June 2016 elections.
The motion sets off a process that could end quickly. Under the constitution, the motion goes to the full congress where it would need to be approved by 52 legislators (40pc). If this happens, the congress would then vote on the impeachment, needing 87 votes (two-thirds).
First vice president and Kuczynski ally Martin Vizcarra, a former governor of mineral-rich Moquegua state, would take over if Kuczynski is forced out.
If Vizcarra were to decline with an eye toward forcing new elections, the presidency would pass to second vice president Mercedes Araoz, who currently heads the cabinet. If she declined, the baton would go to the congressional speaker Luis Galarreta, of Popular Force. In this case, he would be obligated to call general elections within six months.
Former president Alberto Fujimori (1990-2000), the father of Popular Force leader Keiko Fujimori, was impeached in November 2000 in a separate corruption scandal.
